The market for collateralized mortgage obligations is slowly recovering after the banking regulators and the accounting standard setters reached its agreement on the treatment of these investments in a banks portfolio, but industry experts say that the dust has not settled for bankers, they warn the new headache is likely to be investments in structured notes.

CMO activity will probably be driven up by the OCC letter on structured notes, one investment trader told CFO Alert. I think that this is the latest case of regulators crying wolf about so-called risky investments.

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